Romanian exports up 10% in 2013 after climbing 13.3% y/y in Q4 alone

By bne IntelliNews February 10, 2014

Romania’s exports increased 10% to EUR 49.6bn in 2013, the statistics office reported. The annual growth reached two-digit rates in Q3 and Q4 after a more sluggish advance in H1. The external demand was thus the main growth driver last year, when both domestic consumption and investments lagged behind.

The country’s exports surged by 22.5% y/y to EUR 3.86bn in December alone – but this was achieved partly on low base after exports contracted by 4.4% y/y in December 2012 as external demand was losing momentum in the second half of 2012.

On a broader perspective, Romania’s exports returned to a steep upward path in 2013 after stagnating in 2012. Despite the harsh deterioration in 2009 on the back of weak external demand, in 2013 the country’s exports were some 47% above the peak pre-crisis level of 2008.

The main driver for the exports' surge over the past five years was the transport means sector [automobiles included, but not limited to]. From a 36% share in the 2008 exports, this segment expanded to 42% - which is particularly impressing given the sharp expansion of total exports.

The exports of agri-food items have expanded even stronger - from 4.7% of total in 2008 to 8.5% in 2013. Most of the exports are basic vegetal items and livestock. A robust growth potential still exists in both the transport means and the agri-food sectors as well as in the energy sector and, in a longer term, the energy intensive sectors where the country could in principle build on competitive advantage.

Interestingly, the share of exports to EU countries in total exports remained at 70% in 2013 – constant from 2008. Imports from the EU increased from 70% to 76% as the import of Russian gas diminished.

IS THE EXPORTS’ RISE SUSTAINABLE

As exports gradually gain ground, the potential for further growth diminishes though. Even if there are grounds for robust growth of exports in the long term, building further GDP growth entirely on external demand is risky.

Hopefully, the government has performed better recently in draining EU funds and, separately, the private consumption picked up slightly in Q4, supporting expectations for growing consumer confidence. It is premature to conclude smooth continuation of both trends, particularly as the coming elections later in the year will predictably disturb the functioning, already problematic, of the public administration.

EUR mn 2010 2011 2012 2013  Q1 13   Q2 13   Q3 13 Q4 13
FOB Exports 37,368 45,275 45,056 49,563 11,582 12,133 12,765 13,083
FOB exp. %, y/y 28% 21% 0% 10% 4.6% 7.2% 14.6% 13.3%
CIF Imports 46,902 54,948 54,703 55,265 12,659 13,590 14,403 14,612
CIF imp. %, y/y 20% 17% 0% 1% -1.10% -4.40% 4.90% 4.60%
FOB Imports* 44,968 52,683 52,447 52,986 12,137 13,030 13,810 14,010
FOB/CIF Balance -9,534 -9,674 -9,646 -5,702 -1,077 -1,457 -1,638 -1,530
Balance y/y -3% 1% 0% -41% -37.4% -49.7% -37.0% -36.7%
FOB/FOB Balance* -7,600 -7,408 -7,391 -3,423 -555 -897 -854 -927
Balance %, y/y* 11% -3% 0% -54% -53.5% -61.2% -58.0% -49.6%
Source: INS, *IntelliNews estimates

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